The Murphaloon

Richard Murphy says:
September 15 2015 at 7:00 am
Gilt holdings by banks have increased

So, err, how have the banks got money by selling gilts to the BoE then?

No, seriously, walk through this. Before QE the banks held pretty much no gilts at all. During QE bank holdings of gilts rose. Now, with QE maintained but not expanding, banks hold lots of gilts.

So, how have banks got money by selling gilts into QE?


Bank gains from QE were due to reinvestment of proceeds, not direct gain

What fucking proceeds?

20 comments on “The Murphaloon

  1. “Before QE the banks held pretty much no gilts at all.” I looked the figures for that. Before QE banks held 10% of government debt in the US and 2% in the UK (or it might have been the other way round).

  2. Frances

    I am afraid some people simply are ideologically unwilling to accept the reality of a situation if it does not conform to their passionately held beliefs. Let’s hope he doesn’t accuse you of slander/libel this time round…..

  3. re: Op-ed in the Guardian – unfortunately the frothy left will accuse you Frances of being in the grip of Neo-Liberalism (whatever the fuck that is) and stop reading immediately when as Van Patten says, the article challenges their loony misunderstandings of what QE actually is…

    The loony left, as proved by the election of Jeremy Corbyn, don’t appreciate life intruding on their fantasies…

  4. From 2007:

    “Richard Murphy is a founder of the Tax Justice Network. He is director of Tax Research LLP, a visiting fellow at the Centre for Global Political Economy at the University of Sussex, and an External Research Fellow at the Tax Research Institute, University of Nottingham.”

    Given those academic appointments didn’t last long, let’s see if Ritchie is re-hired for the 2016/17 academic year once they get the student feedback.

  5. “Richard Murphy says:
    September 15 2015 at 1:25 pm
    There are technical reasons why the holdings increased
    But the increased liquidity created by QE when banks refused to create it resulted in significant net gain to banks”

    When in a hole most people would stop digging.

  6. Alex – Is he saying that increased liquidity was good for the banks, but they refused to create it, so QE was used instead

    That is, the banks could have made more profit had they done something, but they refused to do it?

    /confused 🙂

  7. @Pellinor

    I don’t know what he thinks he is saying, but what he is sayng is wrong.

    The BoE buying and holding gilts did nothing for liquidity. The banks created liquidity in the money markets when confidence was restored in the interbank market, and this had nothing to do with QE. And nothing to do with making gains from the disposal of gilts that they didn’t hold.

  8. VP:

    “I am afraid some people simply are ideologically unwilling to accept the reality of a situation if it does not conform to their passionately held beliefs.”

    Like Frances on immigration?

  9. Theo, give it a rest. You can have a good faith disagreement about immigration, but not a good faith disagreement about the heliocentric solar system. Murphy’s bêtise re. QE is more the latter than the former.

  10. “Alex


    I don’t know what he thinks he is saying, but what he is sayng is wrong.”


    I am afraid you have jumped the gun.

    Murphy may not yet have decided the meaning of what he has said.

    When he does decide, any difference between what he said and what he meant is irrelevant. Pointing it out is neoliberal pedantry which he has already dealt with elsewhere..

  11. BiCR: In both cases, the issue is not good (or bad) faith, but rationality – ie logic + evidence. Even a flat-earther can argue in good faith; but if he rejects the evidence to the contrary and/or what is deducible from it, he is behaving irrationally.

  12. @Theo

    Don’t knock Sister Coppola. She is the self-appointed patron saint of the immigrant. You must be one of those English xenophobes she says are everywhere.

  13. From the Times leader for tomorrow’s edition …

    ” Figures concocted by Richard Murphy, a chartered accountant who advises him, purport to show huge sums that go uncollected by Her Majesty’s Revenue and Customs. This is deliberate, insists Mr Murphy, because of the government’s ideological zeal for a smaller state. It is a fantasy, so in that respect it is at least not as dangerous as the scheme for “People’s Quantitative Easing” ”

    Rude to snigger

  14. Like I said last night, Murphy has, whether he likes it or not (and right now he seems to be loving it), been tied at the waist to Corbyn. He will be under scrutiny like never before. Interviewers who once saw him as a nice middle-aged duffer will start to seem him for the egomaniac he is. It will unravel. And sadly for him it will not be pleasant.

  15. Frederick:And sadly for him it will not be pleasant.

    But not sadly for us. For us it will be glorious.

    I foresee a spectacular supernova but I’m afraid that life will seem awfully empty when the last particles of Murphy reach the edge of the blogosphere.

  16. Theo, Murphy is akin to a Flat Earther who has been on a trip to the ISS and, on his return to terra firma, insists the Earth is still flat. That’s bad faith.

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